A Current Liability Is Created When a Customer Pays Cash

question 11

True/False

A current liability is created when a customer pays cash for services to be provided in the future.

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Definitions:

Net Income

Net earnings of a business post deductions of any costs and taxes from revenue.

Cash Dividend

A distribution of a company's earnings to its shareholders in the form of cash.

Consolidated Balance Sheet

A balance sheet that presents the assets, liabilities, and equity of a parent company and its subsidiaries as one entity, after eliminating inter-company transactions.

Deferred Income Tax Asset

A Deferred Income Tax Asset is an accounting term for items that reduce future tax payments due to temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities.